Friday, 7 August 2009

Tyler Cowen challenged progressives to come up with an intelligent defence of libertarianism. While I might not be considered especially progressive by European standards, I probably am on the American spectrum. I thought that a view from a European might be interesting given that he makes several comparisons between the two continents in his list.

Incidentally, I think his list is not a bad summary of the progressive position, though I'd disagree with 3 and the second part of 8. Maybe those points are where I am revealing my libertarian bits.

Here's my attempt to return the favour:

As a matter of principle, freedom is both a good in itself and a bulwark against damaging authoritarianism.

In general, each individual knows more than anyone else about their own interests and the context they live in, and by making their own choices they are best able to maximise those interests. Indeed, the only way we can get any genuine insight into someone else’s interests is by observing the choices they make. For these two reasons, our principle should be to allow everyone to make their own decisions wherever possible.

There are circumstances where this leads to problems - externalities, collective action problems or asymmetric information. If we choose to correct these, we should do so with narrowly targeted solutions that fix only the problem itself and do not spill over.

Arguments about the differing utility of wealth between rich and poor people can never be proven, because there is no way to compare interpersonal utility; we can only compare intrapersonal utility by looking at the choices individuals make.

There are discrepancies in the power and resources available to different members of society, but these are mostly the result of individual choices freely taken, and should not be corrected by the majority force of those who regret their own past choices.

If a person bears a high proportion of the costs and benefits of their actions, they have a powerful incentive to maximise the benefits. This implies that greater individual freedom will lead to higher total welfare (expressed, for instance, as economic growth) in a society.

Because we live in a shared world, some actions freely taken can impose costs on other people. Limiting these costs, or allowing them to be compensated, is the main justification for restricting complete freedom of action.

Empirically, societies which implement principles 6 and 7 have borne out their predictions with high levels of economic growth.

We should support free trade and more immigration. Foreign aid should have exactly the same status as redistribution within a country; this may create challenges in achieving political support, but libertarianism is about principle, not pragmatism.

Collective action in general involves agency problems, so we need to carefully restrict the power of those agencies (governments) which individuals cannot opt out of. Collectively enforced power should be executed at the lowest possible level so that decision making is better informed, and so that there are exit options for those who lose out from collective decisions.

The libertarian strand in American history is deeply ingrained and shared by most citizens. Even if Europeans have chosen greater collectivity, what works in their culture will not work in the United States.

It's a good challenge and helped to convince me that writing from a less partisan point of view is much more intellectually stimulating than doggedly defending your corner, even if it generates less traffic.

Update: Matt Yglesias has a go too. And there's an interesting (if occasionally extreme) debate in the comments of Tyler's post. The comments on Matt's come much more from one side of the spectrum, which seems rather to miss the point of the exercise. Thanks to all for the thoughtful comments on my own post.

10 comments:

This is nice and all, but the problem is that it doesn't have anything to do with libertarianism.

The idea that libertarianism is an actual philosophy was destroyed by the Libertarians' adherence to the Bush Administration. It's not that it doesn't exist. It's that no one actually believes it. They just don't want to pay taxes, even for good programs that improve their welfare and the welfare of others.

I consider myself a Milton Friedman Democrat. I endorse the following positions:1) A Guaranteed Income2) A Health Care Plan that:A. Buys everyone Catastrophic CareB. Has a deductible for medical services that can be shopped, and based partly on income3) Narrow Banking4) An end to the War on Drugs5) Major cuts in Military Spending6) A Non-Interventionist Foreign Policy, although we can send some aid and jawbone countriesIn other words, what I consider necessary is a strong social safety net aimed at helping the poor, otherwise a less obtrusive government than we have now. I believe, as did Milton Friedman, that this could save money, lessen the size of govt, and that it is appropriate for the govt to help the truly needy for humanitarian reasons. This is also Hayek's view in "The Road To Serfdom", and has a lot in common with the original Chicago School of Simons, Knight, and Viner. It also comports more closely with the views of Adam Smith and Edmund Burke, who were both very pragmatic and non-ideological.What is my view called then? It seems to me that it's at least possible that Democrats would accept my positions, but Republicans couldn't accept any of them. Am I wrong?

More importantly, I see these issues through the following lens:

Politics=The art of the possiblePolitical Theory=Theory of the good, just,etc. society.Political Economy=The art of the possibleEconomics=Theory of economic behavior

As for "Libertarians' adherence to the Bush Administration.", I never actually noticed anything of the sort. Maybe I'm hanging out with the wrong libertarians? Or maybe Punditus should subscribe to _Liberty_. They were against torture and warrantless wiretapping and US-as-world-policeman before it was cool.

Good start. Number 5 seems overly charitable though. That they believe what they have is their birthright, their entitlement, owning nothing to anyone else, is theirs and anyone who thinks otherwise is a thief. That there may be market failures, but that doesn't entitle anyone to fix them, and if it is their externality, it is just more thieves trying to rob them.

This is a good post. Personally, I have come so far in the past few years that I am no longer certain that I can self-identify as a libertarian, but these are not so bad that I wouldn't have largely accepted them a few years ago.

The idea that libertarianism is an actual philosophy was destroyed by the Libertarians' adherence to the Bush Administration.

Strawman. As has been pointed out repeatedly, try Reason, Cato, The Agitator, etc. Most opposed the Iraq War, Patriot Act, massive increase in spending, etc.

Also, the idea that progressivism is an actual philosophy was destroyed by the Progressives' adherence to the Clinton Administration programs like welfare reform, Carnivore, Echelon, Afghanistan, Iraq, and Sudan offensives, detainment without trial of foreigners, etc. But the public memory is too short for actual consistency. Fortunately (or not), we're about to get some reminders of what progressivism really is as they blindly defend whatever heresy the current Administration and Congressional powers will commit.

This is an excellent exercise and I think your list is a reasonable attempt. I think that 2 gets the closest to the core of what Libertarianism is, I disagree that most Libertarians believe anything like 5; I don't think anyone would believe 5 because it is obviously false.

I'm more of a classical liberal but I think the fundamental difference between Progressives and Libertarians is that Progressives are more "monarchic" whereas Libertarians are more "anarchic". Progressives seem to believe that there is single best form of the good life and society, and that while we might need to have a debate and an election to figure out what it might be, it does exist, and once discovered it is therefore perfectly legitimate for the state to deploy its monopoly of violence in helping to bring it closer. Libertarians on the other hand believe that there is no single best form of the good life or society, and that the best ways of living needs to be developed bottom up by and between individuals, and that therefore people ought to be left free to make decisions and form associations as they best see fit, and that any attempt to force another individual to live their life according to principles they do not agree with is deeply wrong.

If we think about differences in education policies we can see this difference. For me state provided education is an abomination, whereas most left leaning people I speak to are usually pretty shocked when I tell them that I would like to see all state provided education abolished. For me the state threatening everyone with violence to force them to pay for or attend state provided or approved schools is an affront to the principle that there are many different possible ways to educate people and that individuals ought to be left to decide for themselves how best (or indeed whether) to educate themselves or their children. For the progressive the point seems to be that it has been discovered that education is a good thing, and that (after some debate) we have agreed what the best sort of education is, and that therefore it is not only legitimate but an imperative for the state to provide everyone with that education, and for tax payers to pay for it.

Another example from the UK is the TV license fee. My characterisation of Libertarians and Progressives explains why the two sides seem to talk past each other. Progressive defences of the license fee go along the lines of how wonderful the BBC is and what good value it is; all perfectly reasonable points for the progressive to make because we have discovered that the British form of the good society includes a license fee funded BBC; all completely irrelevant for the libertarian as whether the BBC is good or worth the money can only be an individual decision (note that it's "can only be" not "ought to be").

It is very possible to be libertarian until you realize some people cannot make their own choices due to mental, physical or emotional disability, and others make the wrong choices due to mental, physical or emotional disability. Others have become too frail to take care of their own needs, or face skyrocketing medical costs, or are too young, and they end up having to pay for the defective judgment of other people, thus becoming, usually, defective people themselves. Others are too poor to fulfill their own needs or those of their children. Others are too rich to realize others HAVE needs they cannot meet and seem to be incapable of emotionally feeling either remorse for their actions or sympathy for the needs of others, thus violating Adam Smith's "Theory of Moral Sentiments".

We are simply not all healthy, capable individuals -- that's what is wrong with libertarian philosophy. It's a nice theory -- but it doesn't work in practice. All it takes is one health care disaster in your family to completely change your philosophy -- for me, my mother's last hospitalization that generated over $400,000 in medical expenses. Thank goodness for medicare and the fact that she still had private medical coverage as well, since that was all her estate was worth. Others are not so fortunate, and end up with nothing. I became an ex-libertarian with a grateful heart for both medicare and the social security that takes care of my disabled sister and nephew's needs, as well as the trust fund for them that didn't go bankrupt taking care of my mom, and the fact that she was able to leave me and my brother enough to be more comfortable as well.

Yeah, 5 is weird. It seems to hold as a premise that equality is the natural state of affairs - which certainly doesn't hold across regions even if it did within sufficiently comparable small groups - and adds to that the notion that "discrepancies in wealth and power" could be corrected by majority rule if people wanted them to be. If you think biggest power imbalance is that between agents of the state and ordinary citizens, you wouldn't want to give more power to the state in order to remedy this. As for money, those who have some are better able to lobby for their interests than those who don't so it's odd to think one would be likely to reduce imbalances there through state action.

In short, the question of whether we should "address imbalances through state action" doesn't come up for me because I don't think we can really "address imbalances" through state action. To think we could is wishful thinking. It's applying the Green Lantern theory to domestic politics.

"our principle should be to allow everyone to make their own decisions wherever possible"

It's pretty reasonable to say that if we allowed people to decide whether they paid taxes then many people would decide not to pay taxes. But why not allow tax payers to directly decide which public goods their taxes help fund?

"each individual knows more than anyone else about their own interests and the context they live in, and by making their own choices they are best able to maximise those interests."

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This blog is about cognitive and behavioural economics. It discusses their impact on economic theory, and how to apply them in business, especially in pricing and marketing. It also explores how our perceptions and mental models affect the macroeconomy.

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